Different specialities for different jobs

Indeed, my fingers still work.  Been a moment since I felt the need to write out a lengthy blog but all this AI confusion and noise in contracts and contract management have moved me to dust off the virtual typewriter and do something frightfully few professionals are still doing – write something about AI without using AI.  To be fair I was distracted.  They don’t tell you that in the UK GCSEs is an all-encompassing activity for the whole family to enjoy.  As an aside – I am not an educator, but it seems like quite a tough task to have folks decide their lives at 15 or 16.  I know when I was that age, I was more into figuring out how I could play small forward for the New York Knicks than really digging deep into contract optimization methodology, global hot spots for building out centres of excellence or pros/cons of particular tools connecting to ERP vs S2C vs CRM systems. If only I could have mastered my left-handed drive, who knows where we’d be.

If you are paying attention to this space – and not just about valuations or crises for (some) law firms – you’ll notice that over the last year or so you are seeing more and more of the traditional contract lifecycle management tools (CLMs) try and up their AI game and show use cases that look like the “pure” legal AI tools and the “pure” legal AI tools start to build out all sorts of things that traditional CLMs have been doing for years.  I do so love when they use the terms “workflow” or process re-engineering.  It’s like a 16^th century adventurer “discovering” a place where people already live - but somehow charming. Anyway – the point here is that there must be something going on if these two big chunks of the “legal tech” space (a term I still hate) are so interested in hitting contracting and contract management.  You would think that the idea of revenue leakage would be all but gone in contracts. Not so fast.  But that’s a different World Commerce & Contracting report we are part of and I recommend checking that one out. 

All jokes aside, there are many reports out there that come to the same basic conclusions: 

1. The tech has never been better and keeps getting better; 
2. The adoption or at least testing is growing and effectively table stakes; and
3. Despite 1 & 2 being true, actual definable, real money ROI seems to be elusive in many cases.

Now some of this is because the tools aren’t perhaps – being focused the right way.  I do think there is a systemic confusion on speed equalling value.  But I do think both of those have a lot to do with the confusion above.  If these two poles of technology are trying to look like each other and find the perfect “Goldilocks – just right” solution and haven’t quite defined it yet, it can be quite confusing to the buyers and users and yet again another time where the promise of amazing technology doesn’t hit the mark.   And please – this isn’t the technologies’ fault.  Like I said the tools are great.  I do have some notes for your marketing departments, but I’ll let that lie. 

But 500 words in, how do we solve this?  Well – I was recently at a client workshop and this very common question came up to me, “do we need a CLM and a pure Legal AI tool or can we just get away with one?”  Like all things, context matters and there are certainly situations where either or are fine and also many where neither are necessary or appropriate. But in this case, we had a company with a high volume of contracting across multiple internal groups and countries, but also a high degree of specialist contracting issues (e.g. M&A, heavy regulated parts of their business, complicated supply chains) and it was a real quandary (sound familiar?).   My answer was – have you considered how a house if built?  Now I understand for younger readers, they may not understand this, but people used to be able to afford houses - but check me on your choice of AI if you don’t believe me. 

Anyway, my point is that when a house is built, there is a general contractor who is responsible for the frame and structure of the house.   This would be the basic needs such as the foundations, the roof, but also the connections (hallways & stairs) between the rooms and the flow of the rooms that make the most sense (e.g. kitchen should be near where you sit down to eat, not the bedrooms).  But the general contractor can’t do everything and gets specialist such as plumbers and electricians for particular needs in the house construction.  This is particularly true is you want to get more interesting in the bathroom design, wiring of the house on multiple floors, etc.  And you probably don’t want the plumber nor the electrician to build the whole house – but to focus on the very important and useful areas where they can be used and really make a difference.  Similarly, unless the situation is very simple, you don’t want your general contractor doing all the plumbing or electrical wiring. 

So how does this apply to CLM and AI?  Glad you asked.  In my view:

• CLM is fantastic for everyday contracting, interoperability and connectivity across the enterprise.  CLM – when used correctly – is not a lawyer’s tool.  It is for the enterprise to enter into contracting (procurement/sales/other) and be guided by the rules and templates from the legal team with great connections to financial and sales systems and impeccable storage capability - a framework for the house.
• Pure AI is amazing – particularly for lawyers – to work through knotty questions with speed and accuracy, to manage complicated transactions, research and apply new laws and regulations against scenarios for compliance and for disputes. And even create first drafts of new bespoke contracts.  All of these are special and bespoke situations. 

 Am I oversimplifying for effect?  Of course I am and things always change.  But is there a great pure AI out there build for bulk business as usual contracting, has a repository, tracks approvals and out of the box connections to all financial, sales and procurement data today?  No. But that’s ok.   You can get amazing ROI and use today if you know where to apply the tools. 

As with most cases, confusion leads to suboptimal value recovery and just odd purchasing in the market.  The solution is to use the right tool for the right job (feel like I wrote that a few times before.)   To oversimplify – you can’t eat soup with a fork.  So don’t blame the fork.  Now – getting back to my main analogy – you may be wondering, “Hey, I get all that, but what isn’t there a need for an architect to design how this all flows, and where a basic sink is useful over a more elaborate setup is needed?” And yes – a good architect is always needed.  I know a few.